Bitcoin price surged above $55,000, removing any downtrend resistance and possibly signaling a return to the uptrend. This move may have taken the bears by surprise, however, the blueprint for what happened was created about 90 years ago.
Here is a history lesson on Richard Wyckoff, Wyckoff’s theory, and how a market wizard born in the 19th century was able to predict the price movement of a digital asset that didn’t emerge until the 2000s.
Everything you need to know about Ricardo Wyckoff and his theory
Richard Wyckoff was known, according to Wikipedia, as an American stock market investor. He also founded and worked as an editor for The Wall Street Journal in the early 1900s.
Wyckoff himself was particularly fascinated by the fundamental mechanics that caused trends to be formed or changed. He spent much of his subsequent career studying the markets and other investors of the time. Names of those he studied include Jesse Livermore and JP Morgan.
Related reading | Ethereum is potentially trading within the Livermore Accumulation Cylinder Pattern
Wyckoff believed in the idea of a ‘combined actuator’ or the singular mind that controls the tides and roots of the market. Wyckoff then spent his final days in the 1930s examining the behavior of this “composite operator” and came up with certain schemes that would tell traders whether the market was in one of four distinct stages: accumulation, price hike, distribution, and discounting.
Phases of reaccumulation and redistribution are also common as midpoints before a repeat cycle. But how does this all apply to Bitcoin?
– Tony “The Bull” Spilotro (@tonyspilotroBTC) April 23, 2021
Bitcoin price breakout can be predicted using 90 year old chart
Bitcoin’s price movement was in clear distribution when the leading cryptocurrency by market cap reached $65,000 in April 2021, as the above tweet explains.
Related reading | Bulls regain control of Bitcoin trend strength: What to expect
After the cryptocurrency plunged dramatically in May, it was up to the “composer operator” to decide whether to redistribute the asset or regroup it. The chart below shows exactly which one was going on.
Wyckoff re-accummulation should lead to extensive mark up and new all-time highs | Source: BTCUSD on TradingView.com
What should come next, is the coding stage. And when that ends, the distribution will happen again and put a definitive end to the current bull cycle once and for all.
At this point, watching for signs of redistribution or accumulation at the bottom is what techniques designed over 90 years ago have suggested. But that’s only if you believe in the power of Wyckoff’s theory. Do?
Continued TonySpilotroBTC on Twitter or through TonyTradesBTC Telegram. The content is educational and should not be considered investment advice.
Featured image from iStockPhoto, Charts from TradingView.com